THE state-owned meat processor, the Cold Storage Company (CSC), is set to lose two thirds of its estimated 600 head of cattle in a court-sanctioned auction to settle unpaid wages.
Although the exact size of the CSC herd could not be established – deputy agriculture minister responsible for livestock, Paddy Zhanda has been quoted saying the parastatal holds about 600 cattle.
CSC, at one time the largest meat processor in Africa, handled up to 150,000 tonnes of beef and associated by-products a year and exporting beef to the European Union, where it had an annual quota of 9 100 tonnes of beef.
The CSC also had a $15 million revolving payment facility with the EU and used to earn Zimbabwe at least $45 million annually.
The firm is now operating at less than 10 percent of its capacity, employing 500 workers from as much as 1,500 in the 1990s.
According to a notice seen by The Source on Thursday, Hollands Auctioneers will auction 399 CSC cattle comprising calves, bulls, steers, heifers and cows in Bulawayo over three days — on Thursday 16 July 2015, Monday 20 July and Thursday 30 July 2015.
In 2013, the CSC workers’ committe won an arbitration award for $513,110. CSC only managed to pay $60,000, leaving a $453,110 debt. The workers then approached the High Court to register the arbitration award, which is now being enforced.
CSC is reportedly making an annual loss of $6 million every year, stretching over the past ten years.
Recently, CSC chief executive, Ngoni Chinogaramombe told a parliamentary portfolio committee on agriculture that the company has secured an investor to inject $80 million into its struggling business but government is withholding approval, demanding a forensic audit to ascertain the state of the company.
He said the company had submitted three turnaround strategies since 2009 which had not been approved by government, the shareholder.
He said in 2009 a plan by an Indonesian investor to inject $57 million into the company through a joint venture failed after government took too long to approve the deal.
In 2012, CSC submitted another proposal to dispose the company’s non-core assets to raise $8,5 million, which was also rejected.
Another plan, submitted in November 2013 and included disposal of idle assets for $14,5 million and proposals for joint ventures met the same fate.Advertisement
Once a continental giant, CSC has been broken by poor management and persistent outbreaks of foot and mouth, which halted exports in 2001.
Private abattoirs, some of which are hiring CSC facilities, have moved in to fill the void left by the parastatal in the domestic market.
Challenges facing the company include lack of long-term funding, antiquated equipment, declining market share which dropped to below 40 percent since government deregulated the beef industry in 1992.
The company’s debts have ballooned to over $25 million from $9 million in 2009, mainly from fixed costs such as wages, rates and taxes on land.
It owes its 413 employees $3,5 million in salary arrears.
CSC has three functioning abattoirs in Chinhoyi – which has limited operations – Bulawayo and Masvingo while the Kadoma and Marondera plants were mothballed.